Obama Writes Cap and Trade Revenues into the Federal Budget

This is big stuff--and thank goodness the Washington Post still handles global warming well in the news pages, if not on the editorial/op-ed page.

The Obama administration has made an ingenious move: Its soon to be revealed budget relies, for revenue, upon the idea that Congress will pass cap and trade legislation, and this will be bringing big money into the government by 2012. Moreover, the budget commits that money to achieving core administration policy objectives. Or as the Post puts it: "Sources familiar with the document said it would direct $15 billion of that revenue to clean-energy projects, $60 billion to tax credits for lower- and middle-income working families, and additional money to offsetting higher energy costs for families, small businesses and communities."

So now, if you oppose the coming cap and trade bill, you're also messing with the president's attempt to cut the deficit, invest in renewable energy, and give money back to taxpayers. How's that for smart politics?

Moreover, if the cap-and-trade system is bringing in revenue, that means by definition that there has to be a significant initial auctioning off of the emissions permits. They can't be simply given away to industry. That, in itself, is also a big statement, because many companies who support cap and trade in theory also want many or most of the permits gratis.

Again, all of this is consistent with Obama's campaign pledges and position statements--but bear in mind that many of those were drafted and committed to long before the economy fell off a cliff. So what I find so remarkable and impressive is the willingness to stick with them.

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thank goodness the Washington Post still handles global warming well in the news pages

Much of the Post story is boilerplate political horseracing. On the other hand, your story neatly captures the drama and the impact of the key player: you tell the story. I'd say you have done a better job than the Post.

By Matthew Platte (not verified) on 26 Feb 2009 #permalink

I am still a little skeptical about C-A-T as compared to carbon tax. A Science editorial once explained how one of the problems with cap and trade is that there are simply too many sources of CO2 to make it a practical, efficient scheme. Has the Obama administration said something about how this problem can be tackled?

A cap and trade isn't the only way to cut emissions and generate revenue. A carbon tax would do both (arguably better) and both Energy Secretary Chu and Majority Leader Reid have been including it as an option recently...